Lloyds shares to be offloaded by UK government

The government has launched another massive sale of publicly-owned shares in Lloyds, in a sell-off comparable to the massive privatisation schemes of Margaret Thatcher.

Proceeds from previous sales have now reached half the original bail-out package of £20 billion. New plans should raise money for the government while giving some people in the UK their first taste of the stock market. The total raised should exceed the billions raised by Thatcher from the sale of British Telecom and British Gas.

Chancellor George Osborne has told UK Financial Investments to continue the drip-drip sell-off of taxpayer shares through broker Morgan Stanley which began last December. Since then the broker has sold 4.2 billion shares in the market at an average price of just over 80p raising a total of £3.4 billion.

That represented just over five per cent of Lloyds and thanks to the reintroduction of dividend payments, the disappearance of Labour’s threat to banks at the General Election and rising profits from Lloyds the shares were all sold above the average 73.6per cent paid by the taxpayer in 2009’s bail-out.

Morgan Stanley has now been mandated to sell a further five per cent or so of the Government’s stake so long as it can do so above that bail-out price. After sales on Friday the stake has come down to below 19p. It was just under 25per cent in December.

Osborne said: “The trading plan has been a huge success, with almost £3.5 billion raised for the taxpayer so far. This means we have now recovered over £10.5 billion in total, more than half of the taxpayers’ money put into Lloyds, and we now own under 19per cent of the bank.

“But we’re determined to get on with the job of returning Lloyds to private ownership. That’s why I’m extending the plan for six months so that we can make even more progress in returning money to the taxpayer and paying down the national debt.”

He added that this would be part of his Budget announcement that the Treasury planned to raise £9 billion through further Lloyds shares sales in the current fiscal year. That includes just over £1 billion already raised by the first tranche of Morgan Stanley sales.

The Chancellor made no mention of his pre-election pledge to offer Lloyds shares to retail investors at a five per cent discount to the stock market price and with the promise of a bonus one-for-ten free share to those who held on for at least a year. That sell-off could come late this year or, more likely, early next year.